In connection with the transaction, Brookfield will pay $11.46 in cash for each of the shares held by Terraform Power shareholders.
Besides, it will assume the role of TerraForm Power’s sponsor to position it as position as a major wind and solar energy company focused on North America and Western Europe.
Brookfield senior managing partner Sachin Shah said: “We are pleased to increase our significant investment in TerraForm Power and to contribute our operating expertise in the sector to position the company for growth.
“We are confident that our significant renewable power operating experience, financial resources and global institutional relationships will provide TerraForm Power with strong financial flexibility and an attractive pipeline for growth moving forward.”
The acquisition is to benefit Terraform Power through a $500m sponsor equity line provided by its new owner for fueling its further growth.
TerraForm Power chairman and interim CEO Peter Blackmore said: "This agreement with Brookfield is the culmination of our efforts to separate our operations from SunEdison and to position TerraForm Power for future success.
“With the support of Brookfield as TerraForm Power's sponsor, we will gain additional resources to continue to expand our portfolio and increase cash flow on a per share basis. We look forward to working with the talented Brookfield team to achieve a smooth transition."
The board of directors of both the companies have approved the transaction which is likely to close in the second half of the year after meeting certain closing conditions and approvals.
In a separate dealing, Brookfield has agreed to acquire 100% stake in SunEdison’s other yieldco TerraForm Global for a total of $1.3bn, which is inclusive of debt assumption of $455m.
